AMENDED EMPLOYMENT AGREEMENT
Exhibit 10.1
AMENDED
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the
"Agreement" or “Amended Employment Agreement”) is made and entered into as of
this 17th day of June, 2010, by and between Alaska Pacific Bancshares, Inc. (the
"Company"), and its wholly owned subsidiary, Alaska Pacific Bank (the “Bank”),
and Xxxxx X. Xxxx (the "Employee").
WHEREAS, on January 25, 2000, the
Employee, the Company and the Bank entered into an employment agreement (the
“Original Employment Agreement”);
WHEREAS, the Employee continues to
serve as the President and Chief Executive Officer of the Company and of the
Bank;
WHEREAS, the Employee has made and will
continue to make a major contribution to the success of the Company and the Bank
in the position of President and Chief Executive Officer;
WHEREAS, the board of directors of the
Company and the board of directors of the Bank (collectively, the "Board of
Directors") continues to recognize that the possibility of a change in control
of the Bank or the Company may exist and that such possibility, and the
uncertainty and questions which may arise among management, may result in the
departure or distraction of key management to the detriment of the Company, the
Bank and their respective stockholders;
WHEREAS, the Board of Directors
continues to believe that it is in the best interests of the Company and the
Bank for the Company and the Bank to enter into an employment agreement with the
Employee in order to assure continuity of management of the Company and its
subsidiaries; and
WHEREAS, the Board of Directors
believes that the Original Agreement should be amended and restated, as provided
for herein;
WHEREAS, the Board of Directors has
approved and authorized the execution of this Agreement with the
Employee.
NOW, THEREFORE, in consideration of the
foregoing and of the respective covenants and agreements of the parties herein,
it is AGREED as follows:
1. Definitions.
(a) The term
“Change in Control” means (1) an event of a nature that results in the
acquisition of control of the Company or the Bank within the meaning of the
Savings and Loan Holding Company Act under 12 U.S.C. Section 1467a and 12 C.F.R.
Part 574 (or any successor statute or regulation) or requires the filing of a
notice with the Federal Deposit Insurance Corporation under 12 U.S.C. Section
1817(j) (or any successor statute or regulation); (2) an event that would be
required to be reported in response to Item 1 of the current report on Form 8-K,
as in effect on the Effective Date, pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 0000 (xxx "Xxxxxxxx Xxx"); (3) any person (as the
term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the
beneficial owner (as defined in Rule 13d-3 under the Exchange Act) directly or
indirectly of securities of the Company or the Bank representing
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25% or
more of the combined voting power of the Company's or the Bank's outstanding
securities; (4) individuals who are members of the board of directors of the
Company immediately following the Effective Date or who are members of the board
of directors of the Bank immediately following the Effective Date (in each case,
the
"Incumbent Board") cease for any
reason to constitute at least a majority thereof, provided that any
person becoming a director subsequently whose election was approved by a vote of
at least three-quarters of the directors comprising the Incumbent Board, or
whose nomination for election by the Company's or the Bank’s stockholders was
approved by the nominating committee serving under an Incumbent Board, shall be
considered a member of the Incumbent Board; or (5) consummation of a plan of
reorganization, merger, consolidation, sale of all or substantially all of the
assets of the Company or a similar transaction in which the Company is not the
resulting entity, or a transaction at the completion of which the former
stockholders of the acquired corporation become the holders of more than 40% of
the outstanding common stock of the Company and the Company is the resulting
entity of such transaction; provided that the
term "Change in Control" shall not include an acquisition of securities by an
employee benefit plan of the Bank or the Company or a change in the composition
of the Board at the direction of the OTS or the FDIC.
(b) The term "Consolidated
Subsidiaries" means any subsidiary or subsidiaries of the Company (or its
successors) that are part of the affiliated group (as defined in Section 1504 of
the Internal Revenue Code of 1986, as amended (the "Code"), without regard to
subsection (b) thereof) that includes the Bank.
(c) The term "Date of
Termination" means the date upon which the Employee experiences a Separation
from Service, as specified in a notice of termination pursuant to Section 8 of
this Agreement.
(d) The term "Effective
Date" means, with respect to the Original Employment Agreement, January 25,
2000. The Effective Date with respect to this Amended Employment
Agreement is January 25, 2010.
(e) The term "Involuntary
Termination" means the Employee’s Separation from Service (i) at the direction
of either the Company or the Bank or both without his express written consent;
or (ii) by the Employee by reason of a material diminution of or interference
with his duties, responsibilities or benefits, including (without limitation)
any of the following actions unless consented to in writing by the
Employee: (1) a requirement that the Employee be based at any place
other than Juneau, Alaska, or within a radius of 35 miles from the location of
the Company’s administrative offices as of the date of this Agreement, except
for reasonable travel on Company or Bank business; (2) a material demotion of
the Employee (which shall not include a demotion by the Board of Directors that
is taken to comply with TARP or any other regulatory compliance requirement);
(3) a material reduction in the number or seniority of personnel reporting to
the Employee or a material reduction in the frequency with which, or in the
nature of the matters with respect to which such personnel are to report to the
Employee, other than as part of a Bank- or Company-wide reduction in staff; (4)
a reduction in the Employee's salary or a material adverse change in the
Employee's perquisites, benefits, contingent benefits or vacation, other than
(A) as part of an overall program applied uniformly and with equitable effect to
all members of the senior management of the Bank or the Company, or (B) as
required to comply with TARP or any other regulatory compliance requirement (5)
a material permanent increase in the required hours of work or the workload of
the Employee; or (6) the failure of the board of directors of the Company (or a
board of directors of a successor of the Company) to elect him as President and
Chief Executive Officer of the Company (or a successor of the Company) or any
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action by
the board of directors of the Company (or a board of directors of a successor of
the Company) removing him from such office, or the failure of the board of
directors of the Bank (or any successor of the Bank) to elect him as President
and Chief Executive Officer of the Bank (or any successor of the Bank) or any
action by such board (or a board of a successor of the Bank) removing him from
such office (unless such failure or action is taken to comply with TARP or any
other regulatory compliance requirement. The term "Involuntary
Termination" does not include Termination for Cause, termination of employment
due to death or permanent disability pursuant to Section 7(f) of this Agreement,
retirement or suspension or temporary or permanent prohibition from
participation in the conduct of the Bank's affairs under Section 8 of the
Federal Deposit Insurance Act.
(f) The
term “MHCE” shall mean “most highly compensated employee”, as that phrase is
defined under the TARP Requirements.
(g) The
term “Section 409A” shall mean Section 409A of the Code and the regulations and
guidance of general applicability issued thereunder.
(h) The
term “SEO” shall mean “senior executive officer”, as that phrase is defined
under the TARP Requirements.
(i) The
term “Separation from Service” shall have the same meaning as in Section 409A,
taking into account the rules and presumptions provided for in Treasury
Regulation Section 1.409A-1(h) or any successor regulation. Notwithstanding the
foregoing, for purposes of determining whether the Employee is entitled to a
payment on account of Involuntary Termination under Section 7(a) or Section 7(d)
of this Agreement, the term “Separation from Service” shall require the complete
cessation of services to the Bank, the Company and all Consolidated
Subsidiaries.
(j) The
term “TARP” shall mean the Troubled Asset Relief Program of the United States
Department of the Treasury.
(k) The
term “TARP Period” shall mean the period beginning with the Company’s receipt of
any financial assistance under TARP and ending on the last date upon which any
obligation arising from such financial assistance remains outstanding
(disregarding any warrants to purchase common stock of the Company that may be
held by the United States Treasury).
(l) The
term “TARP Recipient” shall mean an entity receiving financial assistance under
TARP.
(m) The
term “TARP Requirements” shall mean the regulations and guidance of general
applicability issued by the United States Department of the Treasury pursuant to
TARP (including but not limited to the interim final rule issued under TARP), as
well as any TARP-related restrictions that specifically apply to the Company or
the Bank.
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(n) The terms "Termination
for Cause" and "Terminated For Cause" mean the Employee’s Separation from
Service with either the Company or the Bank, as the case may be, because of the
Employee's personal dishonesty, incompetence, willful misconduct, breach of a
fiduciary duty involving personal profit, intentional failure to perform stated
duties, willful violation of any law, rule, or regulation (other than traffic
violations or similar offenses) or final cease-and-desist order, a material
violation of the TARP Requirements, or (except as provided below) material
breach of any provision of this Agreement. The Employee shall
not be deemed to have been Terminated for Cause unless and until there shall
have been delivered to the Employee a copy of a resolution, duly adopted by the
affirmative vote of not less than a majority of the entire membership of the
Board of Directors at a meeting of the Board duly called and held for such
purpose (after reasonable notice to the Employee and an opportunity for the
Employee, together with the Employee's counsel, to be heard before the Board),
stating that in the good faith opinion of the Board of Directors the Employee
has engaged in conduct described in the preceding sentence and specifying the
particulars thereof in detail.
2. Term. The
term of the Amended Employment Agreement shall be a period of two years
commencing on the Effective Date of the Amended Employment Agreement, subject to
earlier termination as provided herein (the “Initial Two-Year
Term”). The term of this Amended Employment Agreement may be extended
for an additional two-year term (a “Successor Two-Year Term”), subject to
earlier termination as provided herein, provided that no
later than 90 days prior to the end of the Initial Two-Year Term, the Board of
Directors explicitly reviews and approves the extension. The term of
the Amended Employment Agreement may be further extended for an additional
Successor Two-Year Term (or Terms), subject to earlier termination as provided
herein, provided
that no later than 90 days prior to the end of such Successor Two-Year
Term, the Board of Directors explicitly reviews and approves the
extension. Reference herein to the term of this Agreement shall refer
to both the Initial Two-Year Term and any Successor Two-Year
Term(s).
3. Employment. The
Employee shall be employed as the President and Chief Executive Officer of the
Company and as the President and Chief Executive Officer of the
Bank. As such, the Employee shall have supervision and control over
the daily operations of the Company and the Bank, shall render administrative
and management services as are customarily performed by persons situated in
similar executive capacities, and shall have such other powers and duties as the
Board of Directors may prescribe from time to time. The Employee
shall also render services to any subsidiary or subsidiaries of the Company or
the Bank as requested by the Company or the Bank from time to time consistent
with his executive position.
4. Cash
Compensation.
(a) Salary. The
Company and the Bank jointly agree to pay the Employee during the term of this
Agreement a base salary (the "Salary") the annualized amount of which shall be
not less than the annualized aggregate amount of the Employee's base salary from
the Company and any Consolidated Subsidiaries in effect at the Effective Date;
provided that
any amounts of salary actually paid to the Employee by any Consolidated
Subsidiaries shall reduce the amount to be paid by the Company and the Bank to
the Employee. The current Salary shall be $174,174. The Salary shall
be paid no less frequently than monthly and shall be subject to customary tax
withholding. The amount of the Employee's Salary shall be increased
(but shall not be decreased) from time to time in accordance with the amounts of
salary approved by the Board of Directors or the board of directors of any of
the Consolidated Subsidiaries after the Effective
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Date. The
amount of the Salary shall be reviewed by the Board of Directors at least
annually during the term of this Agreement.
(b) Bonuses. The
Employee shall be entitled to participate in an equitable manner with all other
executive officers of the Company and the Bank in such performance-based and
discretionary bonuses, if any, as are authorized and declared by the Board of
Directors for executive officers. Bonuses provided for under this
Agreement shall be paid no later than 2½ months after the end of the year in
which the Employee obtains a legally binding right to such payments (or such
other time that still qualifies the payment as a “short-term deferral” under
Section 409A). Notwithstanding the foregoing, during such time as the
Company is a TARP Recipient, if the TARP Requirements would preclude the payment
of such bonuses to the Employee (on account of his being an SEO, MHCE, or
otherwise), then any bonuses payable hereunder shall be reduced or eliminated to
the extent necessary to comply with the TARP Requirements.
(c) Expenses. The
Employee shall be entitled to receive prompt reimbursement for all reasonable
expenses incurred by the Employee in performing services under this Agreement in
accordance with the policies and procedures applicable to the executive officers
of the Company and the Bank, provided that the
Employee accounts for such expenses as required under such policies and
procedures.
5. Benefits
(a) Participation in Benefit
Plans. The Employee shall be entitled to participate, to the
same extent as executive officers of the Company and the Bank generally, in all
plans of the Company and the Bank relating to pension, retirement, thrift,
profit-sharing, savings, group or other life insurance, hospitalization, medical
and dental coverage, travel and accident insurance, education, cash bonuses, and
other retirement or employee benefits or combinations thereof. In
addition, the Employee shall be entitled to be considered for benefits under all
of the stock and stock option related plans in which the Company's or the Bank's
executive officers are eligible or become eligible to
participate. Notwithstanding the foregoing, if during the TARP
Period the TARP Requirements would preclude the accrual, payment, provision or
grant of any of the items described in this Section 5(a) to the Employee (on
account of his being an SEO, an MHCE or otherwise), then the accrual, payment,
provision or granting of any such items payable hereunder shall be reduced or
prohibited to the extent necessary to comply with the TARP
Requirements.
(b) Fringe
Benefits. The Employee shall be eligible to participate in,
and receive benefits under, any other fringe benefit plans or perquisites which
are or may become generally available to the Company's or the Bank's executive
officers, including but not limited to supplemental retirement, incentive
compensation, supplemental medical or life insurance plans, company cars, club
dues, physical examinations, financial planning and tax preparation services,
except as limited or prohibited under TARP while the Company is a TARP
Recipient.
6. Vacations;
Leave. The Employee shall be entitled (i) to annual paid
vacation in accordance with the policies established by the Board of Directors
for executive officers, and (ii) to voluntary leaves of absence, with or without
pay, from time to time at such times and upon such conditions as the Board of
Directors may determine in its discretion.
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7. Termination of Employment.
(a) Involuntary
Termination. The Board of Directors may terminate the
Employee's employment at any time, but, except in the case of Termination for
Cause, termination of employment shall not prejudice the Employee's right to
compensation or other benefits under this Agreement. In the event of
Involuntary Termination other than after a Change in Control which occurs during
the term of this Agreement, the Company and the Bank jointly shall, in the case
of an Involuntary Termination described in Section 1(e)(i) (i.e., at the
direction of the Company or the Bank) or, in the case of an Involuntary
Termination described in Section 1(e)(ii) (i.e., by action of the Employee), for
an 18-month period commencing on the Date of Termination or the remaining term
of this Agreement, whichever is longer, (i) pay to the Employee the
Salary at the rate in effect immediately prior to the Date of Termination,
payable in such manner and at such times as the Salary would have been payable
to the Employee under Section 4(a) if the Employee had continued to be employed
by the Company and the Bank, and (ii) provide to the Employee substantially the
same group life insurance, hospitalization, medical, dental, prescription drug
and other health benefits, and long-term disability insurance (if any) for the
benefit of the Employee and his dependents and beneficiaries who would have been
eligible for such benefits if the Employee had not suffered Involuntary
Termination, on terms substantially as favorable to the Employee, including
amounts of coverage and deductibles and other costs to him, as if he had not
suffered Involuntary Termination. Notwithstanding the foregoing, to
the extent the taxable payments under this Section 7(a) would be considered
deferred compensation, and the Employee is considered a “specified employee” (as
defined in Section 409A), then no deferred compensation shall be paid until the
later of (1) the 185th day
following the Employee’s Separation from Service, or (2) the 18-month
anniversary of the date this agreement is entered into (and any deferred
compensation the payment of which is delayed on account of the foregoing shall
be paid on such date). The preceding sentence shall be applied by (x)
treating as much of the payment due under this Section 7(a) as “separation pay
due to involuntary separation from service” (within the meaning of Treasury
Regulation Section 1.409A-1(b)(9)) (“Separation Pay”) as is possible, so that
such Separation Pay may be paid without regard to the preceding sentence, and
(y) treating the Separation Pay as paid prior to the deferred compensation, to
the extent permitted by Section 409A. Furthermore, and
notwithstanding anything herein to the contrary, no amount shall be payable
under this Section 7(a) if such payment becomes an obligation of the Company or
the Bank while the Company is a TARP Recipient during the TARP Period and the
Employee is not permitted to receive those payments under the TARP Requirements
(on account of being an SEO, MHCE, or otherwise). In
addition, no payment shall be made under this Section 7(a) that would cause the
Bank to be “undercapitalized” for purposes of Section 38(b) of the
Federal Deposit Insurance Act (FDIA”) or any successor provision. The
failure of the Board to renew this Agreement for a Successor Two-Year Term shall
not be treated for purposes of this Section 7(a) as an Involuntary
Termination. The Company and the Board shall provide to
the Employee ninety (90) days notice of its intent not to renew this Agreement
for a Successor Two- Year Term Upon non renewal of this Agreement,
this Agreement shall terminate at the end of the two-year term and the Company
and the Bank shall have no further obligation to the Employee under this
Agreement.
(b) Termination for
Cause. In the event of Termination for Cause, the
Company and the Bank shall pay to the Employee the Salary and provide
benefits under this Agreement only through the Date of Termination, and shall
have no further obligation to the Employee under this Agreement. No
payment shall be made under Section 7(a) upon a Termination for
Cause.
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(c) Voluntary
Termination. The Employee's employment may be voluntarily
terminated by the Employee at any time upon 90 days' written notice to the
Company and the Bank or such shorter period as may be agreed upon between the
Employee and the Board of Directors. In the event of such voluntary
termination, the Company and the Bank shall be obligated jointly to continue to
pay to the Employee the Salary and provide benefits under this Agreement only
through the Date of Termination, at the time such payments are due, and shall
have no further obligation to the Employee under this
Agreement. No payment shall be made under Section 7(a)
upon a voluntary termination described in this Section 7(c).
(d) Change in
Control. In the event of Involuntary Termination after a
Change in Control which occurs at any time following the Effective Date while
the Employee is employed under this Agreement, the Company and the Bank jointly
shall (i) pay to the Employee in a lump sum in cash within 25 business days
after the Date of Termination an amount equal to 299% of the Employee's "base
amount" as defined in Section 280G of the Internal Revenue Code of 1986, as
amended (the "Code"); and (ii) provide to the Employee during the remaining term
of this Agreement substantially the same group life insurance, hospitalization,
medical, dental, prescription drug and other health benefits, and long-term
disability insurance (if any) for the benefit of the Employee and his dependents
and beneficiaries who would have been eligible for such benefits if the Employee
had not suffered Involuntary Termination, on terms substantially as favorable to
the Employee, including amounts of coverage and deductibles and other costs to
him, as if he had not suffered Involuntary Termination; provided, however, that
no payment shall be made under this Section 7(d) that would cause the Bank to be
“undercapitalized” for purposes of Section 38(b) of the FDIA or any successor
provision. Notwithstanding the foregoing, to the extent the taxable
payments under this Section 7(d) would be considered deferred compensation, and
the Employee is considered a “specified employee” (as defined in Section 409A),
then such deferred compensation shall be paid on the later of (1) the 185th day
following the Employee’s Separation from Service, or (2) the 18-month
anniversary of the date this agreement is entered into (and any deferred
compensation the payment of which is delayed on account of the foregoing shall
be paid on such date). Furthermore, and notwithstanding anything
herein to the contrary, no amount shall be payable under this Section 7(d) if
such payment becomes an obligation of the Company and the Bank while the Company
is a TARP Recipient during the TARP Period, and the Employee is not permitted to
receive those payments under the TARP Requirements (on account of being an SEO,
MHCE, or otherwise).
(e) Death. In
the event of the death of the Employee while employed under this Agreement and
prior to any termination of employment, the Company and the Bank jointly shall
pay to the Employee's estate, or such person as the Employee may have previously
designated in writing, the Salary which was not previously paid to the Employee
and which he would have earned if he had continued to be employed under this
Agreement through the last day of the calendar month in which the Employee died,
together with the benefits provided hereunder through such date.
(f) Disability. If
the Employee becomes entitled to benefits under the terms of the then-current
disability plan, if any, of the Company or the Bank (the "Disability Plan") or
becomes otherwise unable to fulfill his duties under this Agreement, he shall be
entitled to receive such group and other disability benefits, if any, as are
then provided by the Company or the Bank for executive employees. In
the event of such disability, this Agreement shall not be suspended, except that
(i) the obligation to pay the Salary to the Employee shall be reduced in
accordance with the amount of disability income benefits received by the
Employee, if any, pursuant to this paragraph such that, on an after-tax basis,
the Employee shall realize from the
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sum of
disability income benefits and the Salary the same amount as he would realize on
an after-tax basis from the Salary if the obligation to pay the Salary were not
reduced pursuant to this Section 7(f); and (ii) upon a resolution adopted by a
majority of the disinterested members of the Board of Directors, the Company and
the Bank may discontinue payment of the Salary beginning six months following a
determination that the Employee has become entitled to benefits under the
Disability Plan or otherwise unable to fulfill his duties under this
Agreement. If the Employee’s disability does not constitute a
disability within the meaning of Section 409A, and the Employee is a “specified
employee” within the meaning of Section 409A, then payments under this Section
7(f) shall not commence until the earlier of the Employee’s death or the sixth
month anniversary of the Employee’s Separation from Service, with any delayed
payments being made with the first permissible payment.
(g) Temporary Suspension or
Prohibition. If the Employee is suspended and/or temporarily
prohibited from participating in the conduct of the Bank's affairs by a notice
served under Section 8(e)(3) or (g)(1) of the FDIA, 12 U.S.C. § 1818(e)(3) and
(g)(1), the Bank's obligations under this Agreement shall be suspended as of the
date of service, unless stayed by appropriate proceedings. If the
charges in the notice are dismissed, the Bank may in its discretion (1) pay the
Employee all or part of the compensation withheld while its obligations under
this Agreement were suspended and (ii) reinstate in whole or in part any of its
obligations which were suspended, all in a manner that does not violate Section
409A.
(h) Permanent Suspension or
Prohibition. If the Employee is removed and/or permanently
prohibited from participating in the conduct of the Bank's affairs by an order
issued under Section 8(e)(4) or (g)(1) of the FDIA, 12 U.S.C. § 1818(e)(4) and
(g)(1), all obligations of the Bank under this Agreement shall terminate as of
the effective date of the order, but vested rights of the contracting parties
shall not be affected.
(i) Default of the
Bank. If the Bank is in default (as defined in Section 3(x)(1)
of the FDIA), all obligations under this Agreement shall terminate as of the
date of default, but this provision shall not affect any vested rights of the
contracting parties.
(j) Termination by
Regulators. All obligations under this Agreement shall be
terminated, except to the extent determined that continuation of this Agreement
is necessary for the continued operation of the Bank: (1) by the
Director of the Office of Thrift Supervision (the "Director") or his or her
designee, at the time the Federal Deposit Insurance Corporation enters into an
agreement to provide assistance to or on behalf of the Bank under the authority
contained in Section 13(c) of the FDIA; or (2) by the Director or his or her
designee, at the time the Director or his or her designee approves a supervisory
merger to resolve problems related to operation of the Bank or when the Bank is
determined by the Director to be in an unsafe or unsound
condition. Any rights of the parties that have already vested,
however, shall not be affected by any such action.
(k) Reductions of
Benefits. Notwithstanding any other provision of this
Agreement, if payments and the value of benefits received or to be received
under this Agreement, together with any other amounts and the value of benefits
received or to be received by the Employee, would cause any amount to be
nondeductible by the Company or any of the Consolidated Subsidiaries for federal
income tax purposes pursuant to or by reason of Section 280G of the Code, then
payments and benefits under this Agreement shall be reduced (not less than zero)
to the extent necessary so as to maximize amounts and the value of benefits to
be received by the Employee without causing any amount to become nondeductible
pursuant to or by reason of
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Section
280G of the Code. The Employee shall determine the allocation of such
reduction among payments and benefits to the Employee.
(l) Further
Reductions. Any payments made to the Executive pursuant to
this Agreement, or otherwise, are subject to and conditioned upon their
compliance with 12 U.S.C. 1828(k) and any regulations promulgated
thereunder.
8. Notice of
Termination. In the event that the Company or the Bank, or
both, desire to terminate the employment of the Employee during the term of this
Agreement, the Company or the Bank, or both, shall deliver to the Employee a
written notice of termination, stating whether such termination constitutes
Termination for Cause or Involuntary Termination, setting forth in reasonable
detail the facts and circumstances that are the basis for the termination, and
specifying the date upon which employment shall terminate, which date shall be
at least 30 days after the date upon which the notice is delivered, except in
the case of Termination for Cause. In the event that the Employee
determines in good faith that he has experienced an Involuntary Termination of
his employment, he shall send a written notice to the Company and the Bank
stating the circumstances that constitute such Involuntary Termination and the
date upon which his employment shall have ceased due to such Involuntary
Termination. In the event that the Employee desires to effect a
Voluntary Termination, he shall deliver a written notice to the Company and the
Bank, stating the date upon which employment shall terminate, which date shall
be at least 90 days after the date upon which the notice is delivered, unless
the parties agree to a date sooner.
9. Attorneys’
Fees. The Company and the Bank jointly shall pay all legal
fees and related expenses (including the costs of experts, evidence and counsel)
incurred by the Employee as a result of (i) the Employee's contesting or
disputing any termination of employment, or (ii) the Employee's seeking to
obtain or enforce any right or benefit provided by this Agreement or by any
other plan or arrangement maintained by the Company or the Bank (or a successor)
or the Consolidated Subsidiaries under which the Employee is or may be entitled
to receive benefits; provided that the
Company's and the Bank’s obligation to pay such fees and expenses is subject to
the Employee prevailing in any legal judgment or arbitration, with respect to
the matters in dispute in any action initiated by the Employee or the Employee's
having been determined to have acted reasonably and in good faith with respect
to any action initiated by the Company or the Bank.
10. No
Assignments.
(a) This Agreement is
personal to each of the parties hereto, and no party may assign or delegate any
of its rights or obligations hereunder without first obtaining the written
consent of the other parties; provided, however, that the Company and the Bank
shall require any successor or assign (whether direct or indirect, by purchase,
merger, consolidation or otherwise) by an assumption agreement in form and
substance satisfactory to the Employee, to expressly assume and agree to perform
this Agreement in the same manner and to the same extent that the Company and/or
the Bank would be required to perform it if no such succession or assignment had
taken place. Failure to obtain such an assumption agreement prior to
the effectiveness of any such succession or assignment shall be a breach of this
Agreement and shall entitle the Employee to compensation and benefits from the
Company and the Bank in the same amount and on the same terms as the
compensation pursuant to Section 7(d) of this Agreement. For purposes
of implementing the provisions of this Section 10(a), the date on which any such
succession becomes effective shall be deemed the Date of
Termination.
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(b) This Agreement and all
rights of the Employee hereunder shall inure to the benefit of and be
enforceable by the Employee's personal and legal representatives, executors,
administrators, successors, heirs, distributees, devisees and
legatees.
11. Notice. For
the purposes of this Agreement, notices and all other communications provided
for in this Agreement shall be in writing and shall be deemed to have been duly
given when personally delivered or sent by certified mail, return receipt
requested, postage prepaid, to the Company and Bank at their home offices, to
the attention of the Board of Directors with a copy to the Secretary of the
Company and the Secretary of the Bank, or, if to the Employee, to such home or
other address as the Employee has most recently provided in writing to the
Company or the Bank.
12. Amendments. No
amendments or additions to this Agreement shall be binding unless in writing and
signed by both parties, except as herein otherwise provided.
13. Headings. The
headings used in this Agreement are included solely for convenience and shall
not affect, or be used in connection with, the interpretation of this
Agreement.
14. Severability. The
provisions of this Agreement shall be deemed severable and the invalidity or
unenforceability of any provision shall not affect the validity or
enforceability of the other provisions hereof.
15. Governing Law. This
Agreement shall be governed by the laws of the State of Alaska.
16. Arbitration. Any
dispute or controversy arising under or in connection with this Agreement shall
be settled exclusively by arbitration in accordance with the rules of the
American Arbitration Association then in effect. Judgment may be
entered on the arbitrator's award in any court having
jurisdiction. The OTS may appear at any arbitration hearing but the
decision is not binding on the OTS.
17. Deferral of Non-Deductible
Compensation. In the event that the Employee’s aggregate compensation
(including compensatory benefits which are deemed remuneration for purposes of
Section 162(m) of the Code) from the Company and the Consolidated Subsidiaries
for any calendar year exceeds the maximum amount of compensation deductible by
the Company or any of the Consolidated Subsidiaries in any calendar year under
Section 162(m) of the Code (the “maximum allowable amount”), then any such
amount in excess of the maximum allowable amount shall be mandatorily deferred
with interest thereon at 8% per annum to a calendar year such that the amount to
be paid to the Employee in such calendar year, including deferred amounts and
interest thereon, does not exceed the maximum allowable
amount. Subject to the foregoing, deferred amounts including interest
thereon shall be payable at the earliest time permissible, as required by
Section 409A.
18. Obligations With Respect to
Payments By Employers. The Company shall reimburse the Bank
promptly for its pro rata portion of the expenses attributable to compensation
paid to the Employee, based on the services he provides to the Company. The
amount of such reimbursement shall be equal to Employee’s compensation paid by
the Bank pursuant to this Agreement multiplied by the fraction, the numerator of
which shall be the number of days such person devoted to the activities of the
Company and the denominator of which shall be three
10
hundred
and sixty-five (365) days. Each of the Bank and the Company will act
independently and no action by one will increase the financial obligation of the
other. Therefore, any involuntary termination of Employee by the
Company will not result in a payment by the Bank absent other action by the
Bank.
19. Global TARP
Limitation. Notwithstanding anything herein to the
contrary: during the TARP Period all amounts payable hereunder shall be subject
to and limited by the TARP Requirements as in effect from time to time
(regardless of whether the terms hereof specifically refer to TARP or the TARP
Requirements). The Employee hereby voluntarily waives any claim
against the Company or the Bank for any changes to his compensation, bonus,
incentive and other benefit plans, arrangements, policies and agreements
(including golden parachute agreements and tax gross-ups) that are required to
comply with the TARP Requirements (regardless of whether the compensation,
benefit or other amount is payable under this Agreement). This waiver
includes all claims the Employee may have under the laws of the United States or
any state related to the requirements imposed by the TARP Requirements,
including, without limitation, a claim for any compensation or other payments
Employee would otherwise receive.
20. Knowing and Voluntary
Agreement. Employee represents and agrees that he has read
this Agreement, understands its terms, and that he has the right to consult
counsel of choice and has either done so or knowingly waives the right to do
so. Employee also represents that he has had ample time to read and
understand the Agreement before executing it and that he enters into this
Agreement without duress or coercion from any source.
* * * *
*
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IN WITNESS WHEREOF, the parties have
executed this Agreement as of the day and year first above written.
THIS AGREEMENT CONTAINS A BINDING ARBITRATION PROVISION WHICH MAY BE ENFORCED BY
THE PARTIES.
| Attest: | ALASKA PACIFIC BANCSHARES, INC. |
| /s/Xxxxxxx X. Xxxx | /s/Xxxxxxx X. Xxxxxx |
| Xxxxxxx X. Xxxx, Secretary | By: Xxxxxxx X. Xxxxxx |
| Its: Chairman of the Board of Directors | |
| Attest: |
ALASKA
PACIFIC BANK
|
| /s/Xxxxxxx X. Xxxx | /s/Xxxxxxx X. Xxxxxx |
| Xxxxxxx X. Xxxx, Secretary | By: Xxxxxxx X. Xxxxxx |
| Its: Chairman of the Board of Directors | |
|
EMPLOYEE
|
|
| /s/Xxxxx X. Xxxx | |
| Xxxxx X. Xxxx | |
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